Cyclone Idai cost Ariston $1.5 million losses

HARARE- Agriculture concern, Ariston said it has now fully quantified the losses incurred at its farms in Chipinge and Chimanimani areas aftermath of the ravaging Cyclone Idai which hit the Eastern region of Zimbabwe in March.

In a statement accompanying its financial results for the half year ended 31 March 2019, Ariston said the damage on the Estates varied substantially, with the greatest effects being experienced at the Roscommon Estates in Chimanimani.

The company stressed that despite that no life was lost, damage was incurred on infrastructure, including roads, bridges, irrigation equipment, housing and to a less extend orchards.

Rosscommon which falls under the Southdown Estates division, together with Clearwater and the Southdown Estate (farming operation), is the smallest of the 3 in terms of size and production. However the quality of its tea leaf is presumed to be more valuable than the other 2 estates where tea is grown among other crops.

The Southdown Estates combined have 1,140 hectares of tea, 510 hectares of macadamia nuts, 40 hectares of bananas and 12 hectares of avocado. The estates’ infrastructure, part of which was affected by Idai include tea factories, schools, clinics and workers’ houses.

70% of the total Ariston’s income comes from Southdown Estates with the remainder being attributed to Claremont Estates in Nyanga where the Pome and Stone fruit are produced and a marginal contribution from Kent which is located in Norton.

Over 80% of the company’s produce is destined for foreign markets, tea and macadamia are the predominant produce. Apples and Peeches produced in Nyanga have emerged in the current year following a major investment, a couple of years ago.

Ariston said it ceased with rebuilding infrastructure which was damaged whose early indication show an estimated $1.5 million costs. The company said it is engaged with the matter through an insurance claim.

At the height of Cyclone Idai, Equity Axis contacted the Group CE for an early assessment of the situation to which he responded “some buildings’ rooftops have been blown away and this has affected some warehouses and other facilities at the farms”

He said the road network has been severely damaged and that there is presently lack of access to most of the farms.

“Within the farms, rains continue to pour heavily likewise making it difficult to assess the situation. Spear said communication has been broken and direct timeous information has not been forthcoming” Spear added.

Turning to the crop the CE said the macadamia crop has been negatively affected. Macadamia is the second biggest crop within the company’s crop portfolio and its contribution to the group’s total has swelled over the past 3 years on the back of favourable demand and firming prices.

Spear also highlighted that avocado crop has been damaged, further weighing on the operation.  Tea, which anchors the crop portfolio was not affected by the rains.

-EQUITY AXIS NEWS

Respect Gwenzi

Respect is the Lead Analyst and Managing Director at Equity Axis. He has 8 years experience in respective fields of finance and media. Particular areas of expertise include Asset Management, Stockbroking and Financial Media. Respect is on a mission to change the course of Financial Media in Africa through digitalization

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